Budget on his desk, Corbett has a lot to consider

HARRISBURG, Pa. - With lawmakers' rocky spring session bleeding deeper into summer, nobody knows what Gov. Tom Corbett will do with the no-new-taxes budget plan sitting on his desk.

He is being asked by his fellow Republicans to sign the bill they wrote and passed. Declare victory, they say. Your top-priority legislation to curb public pension benefits and costs can pass in the fall, they say.

"He's the governor and we'll see what he does and we'll see if he listens," said Rep. Mike Vereb, R-Montgomery, a member of House Republican leadership.

The budget bill landed on Corbett's desk on July 1, giving him 10 days to sign it, veto the entire thing or veto certain objectionable spending items before it becomes law on its own. For now, he isn't saying what he'll do.

But he has a lot to think about after a roller-coaster spring legislative session for his fellow Republicans who control the Legislature.

Corbett set the tone in mid-June by saying, in varying ways, that he would not sign the budget or consider a tax increase until lawmakers passed legislation to pare back public pension benefits and liberalize state liquor laws.

Neither reached his desk.

"It was not for lack of trying by the House and Senate," said Senate President Pro Tempore Joe Scarnati, R-Jefferson.

The $29.1 billion spending plan now on Corbett's desk is a patchwork marvel.

There is the rosy 3.5 percent revenue growth projection. There is $600 million in found cash. And there is an additional $2 billion in one-time transfers from off-budget funds or one-time cash expectations that amount to the biggest use of stop-gaps outside of the three years around the Great Recession.

It even includes $400 million in delayed payments to health care providers - a maneuver that prompted Sen. Vincent Hughes, D-Philadelphia, to call it the "Wimpy budget" in a nod to the legendary moocher from the Popeye cartoon who was famous for saying, "I'll gladly pay you Tuesday for a hamburger today."

Every single Democrat voted against the budget bill after advocating unsuccessfully for higher taxes on the booming natural gas industry and sales of tobacco products. They now warn that the Republicans' budget will leave the state's finances in an even bigger lurch next year.

"We'll start to see that problem manifest itself in, I think, January, February or March of next year and it's going to lead to ... anywhere from a $2.5 billion to a $2 billion structural deficit that we're going to have to deal with," said Senate Minority Leader Jay Costa, D-Allegheny.

Another shoe could fall sooner: Standard & Poor's warned two months ago that it could downgrade Pennsylvania's bond rating if it did not see significant strides to address built-in budget deficits and long-term pension liabilities.

On Wednesday, House Republican leadership gave up until the fall on the pension legislation that Corbett had sought, but only after a series of ugly procedural jousts around it and an unsuccessful bid to squeeze support out of Philadelphia Democrats by holding up a critical funding bill for the city's public schools.

In the meantime, senators are returning to the Capitol on Tuesday after a fight between House and Senate Republican leaders hung up a budget-related bill that directs hundreds of millions of dollars in spending and is packed with lawmakers' pet wants.

Corbett's budget secretary, Charles Zogby, said the administration never agreed to the details of the spending plan that lawmakers approved. Corbett's decision on what to do with it will involve whether it takes too many risks to balance and whether it is acceptable without some sort of relief from rising pension costs, Zogby said.

"What this budget does is it fails to deal with what is the No. 1 cost-driver that we have that's undermining our budget, that is undermining local school district budgets and, frankly, is undermining household budgets," Zogby said. "It's very difficult to get the budget under control and on a sustainable basis if you continue to ignore the pension crisis."